Don't leave the project of 1 million social housing apartments on paper
In early April 2023, the Government approved the Project "Investing in the construction of at least 1 million social housing apartments for low-income people and industrial park workers in the period 2021 - 2030".
Up to now, after more than a year of implementing the Project, the number of social housing projects seems to be "standing still". In particular, Hanoi and Ho Chi Minh City, the two largest cities in Vietnam, are "thirsty" for this housing segment, however, the speed of project completion and approval has not shown much progress.
According to the latest report of the Ministry of Construction released last weekend, in the second quarter of 2024, there were 9 social housing projects nationwide that were being implemented. Of these, 3 projects were completed in the quarter with 1,120 units, 1 project in Thai Nguyen started construction with 395 units and 5 projects were approved for investment policy.
Hanoi alone had no completed, started, or approved investment projects in the second quarter of 2024. Ho Chi Minh City had only one completed project, with a modest number of only 368 units. In the second quarter, Ho Chi Minh City also had no ongoing projects, and the city did not approve any investment projects in the quarter.
According to the Ministry of Construction, from 2021 to the second quarter of 2024, the country has completed 79 completed projects, with a scale of 40,679 units, meeting 4% of the Project. Thus, although nearly half the journey has been completed, the number of social housing apartments is still quite far from the target set by the Government.
Hanoi and Ho Chi Minh City, the two largest cities in Vietnam, are "thirsty" for the social housing segment. Photo: BDS
Currently, the country has 128 projects that have started construction, with a scale of 111,688 apartments. If these projects do not fall behind schedule, in 1-2 years, Vietnam will have a total of 152,367 apartments, meeting 15.2% of the project's progress.
In addition, localities have recently approved investment policies for 412 projects, with a scale of 409,449 apartments. If these projects are implemented on schedule, in the next 4-5 years, Vietnam will have a total of 561,816 social housing apartments, meeting nearly 56.2% of the Project. Thus, Vietnam needs to approve hundreds of other social housing projects to complete the set goals. Some opinions say that if the implementation momentum in the recent period continues, 1 million social housing apartments may have to remain on paper.
At a conference held in February 2024, the leaders of the Ministry of Construction assessed: Some localities such as Hanoi and Ho Chi Minh City are large cities with a high concentration of low-income workers and a very high demand for social housing, but the results are still very limited, showing that the localities are not determined and proactive.
In addition, many localities have not paid attention to building social housing such as Vinh Phuc, Ninh Binh, Nam Dinh, Long An, Quang Ngai... These are provinces with no social housing projects starting from 2021 to early February 2024.
The reason pointed out by the Ministry of Construction is that the social housing development policy has not been amended in a timely manner, leading to many limitations such as lack of land fund, limited credit capital, and long implementation time. Although amended laws such as the Housing Law and Real Estate Business Law have been passed, they will not be implemented until early 2025. Therefore, incentives for investors or simplification of procedures have not been applied.
To support the completion of the 1 million apartment project, the Government and ministries and sectors have proposed a number of solutions. The most prominent of these is a VND120,000 billion credit package to support the development of social housing, worker housing, and the renovation and reconstruction of old apartment buildings.
However, this support package was announced in April 2023. By the end of the second quarter of 2024, that is, after 14 months of implementation, only VND 1,234 billion was disbursed, reaching 1.03% of the total credit package.
Also in the event in February 2024, Deputy Prime Minister Tran Hong Ha was "dissatisfied" because this credit package was disbursed very slowly. Therefore, Deputy Prime Minister Tran Hong Ha requested the State Bank to review and re-evaluate the implementation of the 120,000 billion VND incentive package and make a plan, temporarily compensate, and settle the interest rate compensation for social housing loans.
Recently, in another event in mid-August 2024, Prime Minister Pham Minh Chinh directed the Ministry of Construction to preside over and coordinate with the Ministry of Planning and Investment, the Ministry of Finance, and the State Bank to research and develop a credit package of VND 30,000 billion to provide loans for buying, renting, leasing, building or renovating houses to implement social policies. This credit package will be assigned to the Bank for Social Policies to implement.
Of which, 15,000 billion VND will be taken from the issuance of government bonds and 15,000 billion VND from the entrusted local budget capital.
Will new laws help increase social housing supply?
In addition to credit packages from the Government, some opinions say that three new laws related to the real estate market, including the 2023 Housing Law, the 2023 Real Estate Business Law and the 2024 Land Law, will be a new start for the supply of social housing.
Mr. Nguyen Hoang Nam - General Director of G-Home said: The law that has the strongest impact on the social housing segment is the Housing Law 2023. This law has a number of new points, significantly removing difficulties for businesses. For example, solving the land valuation stage, helping to significantly shorten the process of developing social housing.
In addition, with previous regulations, people who were eligible to buy social housing did not have enough money, while middle-class people who did not have enough money to buy commercial housing did not meet the conditions to buy social housing. Along with that are overlapping and complicated regulations on household and household registration issues. However, the Housing Law 2023 has "untied" most of these outstanding issues.
According to Mr. Nam, at the end of July, the Government passed Decree 100 detailing a number of articles of the Housing Law on the development and management of social housing. This Decree has many breakthroughs.
For example, Decree 100 sets out the income requirement for an individual of 15 million VND/month and 30 million VND/month for a couple to be able to access social housing.
Meanwhile, according to previous regulations, the condition for buying social housing is personal income below 11 million VND/month/person, which is very difficult to implement because they belong to the low-income group, do not have the need to buy a house or do not have enough conditions to repay the loan.
Not to mention, the risk of lending to the wrong target when in the family, one spouse has an income of less than 11 million VND/month but the other can earn hundreds of millions (self-employed). This is also a difficult point for banks when determining the target for lending.
“When approaching the total income of a household (including a couple) with a total income not exceeding the threshold of 30 million VND/month, it will help those in need of housing to have easier access to preferential credit support packages from the State,” said Mr. Nam.
In addition, Mr. Nam said that currently in developed countries, 1 in 5 people are living in social housing. Therefore, with the strong loosening of the law, Mr. Nam expects another circular to be issued to help remove all difficulties so that investors can feel secure in building social housing.
However, in addition to the existing support policies, the Government needs to have some other solutions that are strong and drastic enough for large investors to participate in social housing projects. For example, the Ho Chi Minh City Real Estate Association (HoREA) proposed to consider increasing the standard profit for investors in social housing projects to 15%, instead of only 10% as at present.
Dinh Tran
Source: https://www.congluan.vn/de-an-xay-dung-mot-trieu-can-ho-nha-o-xa-hoi-co-nguy-co-nam-tren-giay-post308741.html
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